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Do soaring global oil prices heat up the housing market? Evidence from Malaysia

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  • Le, Thai-Ha

Abstract

This study analyses the effects of oil price and macroeconomic shocks on the Malaysian housing market using a SVAR framework. The specification of the baseline model is based on standard economic theory. The Gregory-Hansen (GH) cointegration tests reveal that there is no cointegration among the variables of interest. Results from performing Toda-Yamamoto (TY) non-Granger causality tests show that oil price, labor force and inflation are the leading factors causing movements in the Malaysian housing prices in the long run. The findings from estimating generalized impulse response functions (IRFs) and variance decompositions (VDCs) indicate that oil price and labor force shocks explain a substantial portion of housing market price fluctuations in Malaysia.

Suggested Citation

  • Le, Thai-Ha, 2015. "Do soaring global oil prices heat up the housing market? Evidence from Malaysia," Economics Discussion Papers 2015-8, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:20158
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    References listed on IDEAS

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    3. Zhu, Huiming & Huang, Hui & Peng, Cheng & Yang, Yan, 2016. "Extreme dependence between crude oil and stock markets in Asia-Pacific regions: Evidence from quantile regression," Economics Discussion Papers 2016-46, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    housing market fluctuations; oil price shocks; macroeconomic shocks; Malaysia;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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